Policy Rate Updates: Double cut finale
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Monthly Economic Update: One for the road
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Inflation Update: Still low, still slow
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The Gist
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- Net inflows of foreign direct investments into the Philippines fell 25.9% year-on-year in September to USD 320 million, the lowest in over five years.
- The Philippines’ unemployment rate rose to 5% in October, reaching 2.54 million jobless Filipinos, despite an increase in overall employment.
- The Philippines’ agricultural goods trade deficit narrowed by 15.1% year-on-year to USD 932.97 million in October, as imports dipped by 8.7% while exports rose 0.6%.
- The US Employment Cost Index increased 0.8% in the third quarter, signaling slightly less than expected growth in labor costs and softening annual wage gains.
- China’s annual consumer inflation accelerated to a 21-month high of 0.7% in November, driven by food price spikes, while factory-gate deflation deepened.
Our Portfolio Recommendation
Our peso portfolio is tilted slightly toward fixed income. While local inflation remains low and monetary easing is likely to continue, yields may be pushed higher by upcoming bond auctions. Continued rate cuts and rising consumer strength are also favorable for local equities, especially real estate and retail. The dollar portfolio is the reverse, with slightly lower fixed income owing to the uncertainty of the effects of tariffs on inflation. US Federal Reserve rate cuts are also closely watched. We remain positive on global equities, with a preference for US sectors, particularly technology, communication services, and financials.
| 2025 Metrobank Forecast | 2026 Metrobank Forecast | 2027 Metrobank Forecast | |
|---|---|---|---|
| GDP | 4.9% | 5.4% | 6.0% |
| Inflation | 1.8% | 3.3% | 3.0% |
| BSP Target Reverse Repurchase Rate | 4.50% | 4.00% | 4.00% |
| Federal Funds Rate | 3.75% | 2.75% | 2.75% |
| USD/PHP | 59.0 | 60.8 | 58.9 |
CHART OF THE DAY
Chart of the Day
Unemployment sees uptick in October
The unemployment rate in October 2025 stood at 5.0%, higher than October 2024’s 3.9% but slightly lower than July 2025’s 5.3%. In absolute terms, 2.54 million people were unemployed in October 2025, up from 1.97 million a year earlier but marginally fewer than July’s 2.59 million. Source: PSA
Featured Reports
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USD/PHP closes nearly flat amid two-way flows
- The USD/PHP exchange rate opened 3 centavos higher at 59.25 on Wednesday, tracking the rise in offshore prices overnight.
- Suspected local supply capped the upside, with light offers seen around the level.
- Despite a brief dip, the pair remained supported and moved higher late in the session on likely offshore demand.
- The USD/PHP exchange rate ultimately closed at 59.21, or 1 centavo lower day-on-day.
- The current support levels of USD/PHP are 58.80/90, while the resistance levels are 59.30/40.
READ MORE
Local yields recover amid late buying session
- The local government securities (GS) market continued to track the rise in global yields on Wednesday.
- Fixed Rate Treasury Note (FXTN) 7-70 and FXTN 10-73 touched intraday highs of 5.555% and 5.900%.
- Opportunistic buying in the afternoon helped most bonds end mostly flat versus prior levels.
- The market now focuses on the US Federal Reserve (the Fed) policy rate cut decision of 25 basis points last night, with global bond moves likely to drive early price action in the local GS market.
- Locally, the market widely expects a 25-basis-point rate cut from the Bangko Sentral ng Pilipinas (BSP), with forward guidance likely to drive the next market move.
READ MORE
PSEi declines ahead of policy rate meetings
- The Philippine Stock Exchange index (PSEi) ended 16.70 points lower at 5,959.94 on Wednesday, as investors stayed cautious ahead of both the BSP and the US Fed policy decisions.
- Market turnover remained steady at PHP 5.81 billion, with foreign investors trimming risk through net outflows of PHP 787.08 million.
- Metropolitan Bank & Trust Co. (+2.80%), Ayala Corp. (+1.93%), and Jollibee Foods Corp. (+1.58%) provided some lift.
- Meanwhile, Converge Information & Communications Technology Solutions Inc. (−3.23%), DigiPlus Interactive Corp. (−3.02%), and Aboitiz Equity Ventures (−2.98%) kept the index subdued.
- In economic news, unemployment in the Philippines jumped to 5% in October, leaving 2.54 million Filipinos jobless as labor force participation and overall employment both declined, according to the Philippine Statistics Authority.
READ MORE
USD/PHP closes nearly flat amid two-way flows
- The USD/PHP exchange rate opened 3 centavos higher at 59.25 on Wednesday, tracking the rise in offshore prices overnight.
- Suspected local supply capped the upside, with light offers seen around the level.
- Despite a brief dip, the pair remained supported and moved higher late in the session on likely offshore demand.
- The USD/PHP exchange rate ultimately closed at 59.21, or 1 centavo lower day-on-day.
- The current support levels of USD/PHP are 58.80/90, while the resistance levels are 59.30/40.
READ MORE
Local yields recover amid late buying session
- The local government securities (GS) market continued to track the rise in global yields on Wednesday.
- Fixed Rate Treasury Note (FXTN) 7-70 and FXTN 10-73 touched intraday highs of 5.555% and 5.900%.
- Opportunistic buying in the afternoon helped most bonds end mostly flat versus prior levels.
- The market now focuses on the US Federal Reserve (the Fed) policy rate cut decision of 25 basis points last night, with global bond moves likely to drive early price action in the local GS market.
- Locally, the market widely expects a 25-basis-point rate cut from the Bangko Sentral ng Pilipinas (BSP), with forward guidance likely to drive the next market move.
READ MORE
PSEi declines ahead of policy rate meetings
- The Philippine Stock Exchange index (PSEi) ended 16.70 points lower at 5,959.94 on Wednesday, as investors stayed cautious ahead of both the BSP and the US Fed policy decisions.
- Market turnover remained steady at PHP 5.81 billion, with foreign investors trimming risk through net outflows of PHP 787.08 million.
- Metropolitan Bank & Trust Co. (+2.80%), Ayala Corp. (+1.93%), and Jollibee Foods Corp. (+1.58%) provided some lift.
- Meanwhile, Converge Information & Communications Technology Solutions Inc. (−3.23%), DigiPlus Interactive Corp. (−3.02%), and Aboitiz Equity Ventures (−2.98%) kept the index subdued.
- In economic news, unemployment in the Philippines jumped to 5% in October, leaving 2.54 million Filipinos jobless as labor force participation and overall employment both declined, according to the Philippine Statistics Authority.
READ MORE